Executive: Two Arctic gas pipelines can't be built at once

Two natural gas pipelines from the Arctic via Canada to southern markets cannot be built at the same time, says a senior industry executive. Wayne Sartore, vice-president, northern pipeline development for Enbridge Inc., Calgary, told a North American Pipelines conference in Calgary that industry resources will not support construction of both lines at the same time.


By an OGJ Online Correspondent


CALGARY, Mar. 20
�Two natural gas pipelines from the Arctic via Canada to southern markets cannot be built at the same time, says a senior industry executive.

Wayne Sartore, vice-president, northern pipeline development for Enbridge Inc., Calgary, told a North American Pipelines conference in Calgary that industry resources will not support construction of both lines at the same time.

Two proposals, one from Alaska via the Yukon and another from the Mackenzie Delta into Alberta, are under consideration.

Yukon Premier Pat Duncan and Northwest Territories Premier Stephen Kafkwi have both said they support both lines being built. Kafkwi has called on Ottawa to block construction of a line from Alaska if a Mackenzie Delta line isn�t built. Both Alaska and the Yukon support the competing Alaska Highway pipeline project from the North Slope via the Yukon into northern British Columbia, but have said the market could support construction of both lines.

Sartore said that is a good answer from a political perspective, but not from an industry viewpoint.

�We don�t think it can be done just because of capacity�human capacity and equipment capacity. These are big, big projects,� Sartore said.

�As pipeline contractors, you just physically can�t do it. There just isn�t enough equipment and people to do that. They physically can�t be built in the same 2-3 year window.�

Enbridge is a major pipeline company that currently operates a crude oil pipeline in the Mackenzie Valley from Norman Wells, NWT, to pipeline connections in Alberta.

Pipeline projects from both Alaska and the Mackenzie Delta are under study by industry groups and are at the feasibility stage.

The Alaska North Slope holds 31.2 tcf of proven reserves and potential reserves of 68 tcf. The Mackenzie Delta has 6 tcf of proven reserves under study for development and estimated potential of 64 tcf.

Analyst John Mawdsley of FirstEnergy Capital Corp. told the conference the market will eventually require gas supplies from both the North Slope and Mackenzie Delta. But he said the Alaska line is likely to be built first, with a Mackenzie line following several years afterwards.

Most industry analysts expect it will be at least 6 years before any line is completed from the Arctic regions.

High natural gas prices and increasing demand in the US and Canada have sparked renewed interest in Arctic gas development. It was first considered in the 1970s but was scuttled by poor economics and environmental concerns.

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